Synopsis
One of Library Journal's Best Business Books of 2004, Winner in the category of Economics in the 2004 Professional/Scholarly Publishing Annual Awards Competition presented by the Association of American Publishers, Inc. and CHOICE Outstanding Academic Title for 2004
In 2030, as 77 million baby boomers hobble into old age, walkers will outnumber strollers; there will be twice as many retirees as there are today but only 18 percent more workers. How will America handle this demographic overload? How will Social Security and Medicare function with fewer working taxpayers to support these programs? According to Laurence Kotlikoff and Scott Burns, if our government continues on the course it has set, we'll see skyrocketing tax rates, drastically lower retirement and health benefits, high inflation, a rapidly depreciating dollar, unemployment, and political instability. The government has lost its compass, say Kotlikoff and Burns, and the current administration is heading straight into the coming generational storm.
But don't panic. To solve a problem you must first understand it. Kotlikoff and Burns take us on a guided tour of our generational imbalance, first introducing us to the baby boomers— their long retirement years and "the protracted delay in their departure to the next world." Then there's the "fiscal child abuse" that will double the taxes paid by the next generation. There's also the "deficit delusion" of the under-reported national debt. And none of this, they say, will be solved by any of the popularly touted remedies: cutting taxes, technological progress, immigration, foreign investment, or the elimination of wasteful government spending.
So how can the United States avoid this demographic/fiscal collision? Kotlikoff and Burns propose bold new policies, including meaningful reforms of Social Security, and Medicare. Their proposals are simple, straightforward, and geared to attract support from both political parties. But just in case politicians won't take the political risk to chart a new direction, Kotlikoff and Burns also offer a "life jacket"— guidelines for individuals to protect their financial health and retirement.
Review
"This may be the year's most important book." --Choice; "Having painted a fiscal picture as awful as 'Guernica,' the authors unveil two bold plans.... Their ideas are thoughtful and, whatever doubts one might have, preferable to the status quo, which sticks the country's entire financial future in the ICU." --Tod G. Bucholtz, The Wall Street Journal; "Lays out the problem in understandable language and compelling detail." --Washington Post; "The policy solutions of Kotlikoff and Burns are specific and ingenious.... Moreover, one of the real strengths of [their] book is that it gives some good insights about how individuals can prepare themselves for a future economy in which tax rates and inflation rise and social benefits become smaller.... [T]he real import of their argument is that even with growth, the financing of the current entitlement system will eventually have to be dramatically rebuilt- and that's a message that should be heard." --Michael Mandel, Business Week; "This is a book any serious investor should absorb and act upon. If you're one of the 77 million American Baby Boomers to whom it is addressed... you'd best read it soon." --Jonathan Chevreau, National Post; "A serious attempt to look at a problem that most people are trying to ignore." --Alan Beattie, Financial Times; "Here's a book to help us batten down the hatches." --Chris Tucker, Dallas Morning News"
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